Most workers want to be paid automatically every day, according to new survey
A majority of American workers (83%) think they should have access to their earned wages at the end of each day or shift, according to a new survey. Their preference goes against the traditional two to four week pay cycles that have been in place for decades.
A lot of money is at stake. Ernst & Young estimated everyday there are roughly $ 1 trillion in employer payroll accounts in the United States and 36 other developed countries.
The American Worker Study was conducted online by The Harris Poll for payroll and human resources management company Ceridian in August 2021. Ceridian said the survey: “… reveals clear expectations of millennials up to Generation X employees (aged 18 to 44). ) to make the salary more flexible. ‘
For this workplace demographic, the survey also found that:
- 80% would prefer their salary to be automatically paid into their bank account as they earn it.
- 78% said access to free on-demand pay would increase their loyalty to an employer; 79% said it would make them feel more valued as an employee.
- 81% would accept a job with an employer that gives them access to a wage earned on demand at no cost compared to an employer that does not.
“These results show that on-demand pay is not only a differentiator, but also a requirement for employees,” said Seth Ross, Managing Director of Dayforce Wallet and Consumer Services at Ceridian.
“With the incredible pace of innovation affecting every industry, we are entering a new evolution in how people want to be paid. With continuous pay, employers give workers more control over their financial well-being. It means giving people the peace of mind to cover an unforeseen expense or the ability to take advantage of investment opportunities that they might not otherwise have, ”said Ross.
Help build trust
Human Resources and Workforce Expert Dr Kate Tulenko said: “Companies pay their employees on a daily basis for a number of reasons. One is in low trust industries where employees don’t necessarily trust employers to pay them. This is especially true in industries that have a history of wage theft or where many employees are undocumented. You also see the daily wage in industries where there is a high level of staff turnover or where employees live paycheck to paycheck and have a history of addiction to interest rate payday loans. raised.
Relieve financial pressures
According to Ernst & Young, “The main use case for pay-on-demand is the daily financial pressures, which we have found to be widespread: 70% of individuals in the UK and US experience financial pressures on a regular basis. Half of these people have faced a financial deficit between pay periods and experience this problem about every four months.
“The negative impacts for individuals are considerable: almost 75% of those who experienced financial difficulties reported a significant deterioration in their health and well-being.
A growing trend
Tulenko observed that “the trend in daily pay is on the rise and there are a number of companies that make it easier for employers to pay their employees on a daily basis. Daily pay has also become popular in industries where companies compete for staff. For example, the restaurant industry is a perfect storm for daily wages: low pay, high number of unbanked workers, high turnover, and high staff vacancy rate.
“We also see daily wages in extremely dangerous sectors. For example, in the healthcare sector, workers may be paid daily to work during a pandemic, such as Covid during which there is a shortage of staff[s] and high levels of personal risk, ”she said.
Advice to business leaders
Impact of daily transaction cost
Human resources expert Tulenko said, “The downside to daily payroll employees is the transaction cost of a daily payment. In some cases, this can cost more than late fees, overdraft fees, or credit card advances.
“There is the concern that with certain forms of [pay] the fees can end up being higher than the cost of overdraft fees or late fees or payday loans.
Faster cash flow
“The downside for businesses is cash flow,” according to Tulenko. Rather than delaying “employee payday by two weeks or a month, the money needs to be available immediately. This will increase the amount of money a business needs to keep on hand. If a company pays its employees only once a month, it has a longer period of time to accumulate the cash needed for payment; but if a business pays daily, it needs to have a faster cash flow that makes money available every day.
She recommended that “a business should consider the details and the potential impact it has before considering this. [option] for their employees. The company can potentially solve this problem as well. [instead] by granting emergency advances to employees … or by training them and supporting them in budgeting.